Wednesday, 1 May 2013

FCC adopts cots model regarding Phase II

"In the USF/ICC Transformation Order, the Commission comprehensively reformed and modernized the universal service and intercarrier compensation systems to maintain voice service and extend broadband-capable infrastructure. As part of the reform, the Commission adopted a framework for providing support to areas served by price cap carriers known as Phase II of the Connect America Fund. An estimated eighty-five percent of the approximately 6.3 million locations in the nation that lack access today to terrestrial fixed broadband at or above the Commission’s broadband speed benchmark live in areas served by price cap carriers...Specifically, the Commission will provide support through “a combination of competitive bidding and a new forward-looking model of the cost of constructing modern multi-purpose networks." Using the cost model to “estimate the support necessary to serve areas where costs are above a specified benchmark, but below a second ‘extremely high-cost’ benchmark,” the Commission will offer each price cap local exchange carrier (LEC) “a model-derived support amount [for a period of five years] in exchange for a commitment to serve all locations in its service territory in a state that, based on the model, fall within the high-cost range and are not served by an competing, unsubsidized provider" (see the Order).